People don’t just love the payments app Venmo because it lets them easily divvy up the cost of an expensive champagne-laden brunch, or chip in on a joint birthday gift for a friend.
They also love it because it lets them scope the transactions of everyone in their social circle.
The app lets people send money back-and-forth, and unless they set a transaction as “private,” it will appear on the app’s social feed, sans dollar-amount, for anyone connected to them to see.
PayPal CEO Dan Schulman actually considers Venmo’s social feed of transactions the service’s “secret sauce,” he revealed on stage at Business Insider’s Ignition conference on Wednesday.
PayPal owns Venmo through its acquisition of parent company Braintree in 2013.
“Venmo users open the app four or five times a week. But they only do transactions a couple of times a week,” he said. “It’s because everyone is looking at the feed to see, ‘What did you buy?’ ‘What icons did you put on your feed?’ ‘Why did you go and buy that?’ The secret sauce on Venmo is one, the ease of use, but two, that it’s tied into your social network. So that payments becomes a sharing experience.”
As a very active Venmo user, I have to admit that I do love getting to peek at who is spending money together and on what. Maybe you’ll find out about a party based on seeing a group of people all paying each other back for the same thing (like “~SuNdAy FuNdAy DrInKs~”). Once, a friend texted me to ask me if I had rekindled with an ex, because she saw me send him money on Venmo. It also adds a layer of accountability: If you see that everyone else has already sent your one friend money for dinner, you’ll remember to quickly complete your payment.
Also, sometimes people write hilarious things. For example, here’s what my Venmo newsfeed looks like right now — note what Pete charged Kenneth, or what Michelle paid Nora for:
I don’t think I’ve opened the app just to check what people are paying for more than a couple of times, but I wouldn’t be surprised if younger or more social-media-obsessed people did it more often, as Schulman says.
He also added that, generally, young people can’t get enough of the app, while the older set prefers other apps for peer-to-peer payments.
“We joke inside the company that there’s a ‘Venmo line,'” he said. “That line is about 30 years old or so. Below that, pretty much everybody is using Venmo. Above that, people are using other forms of PayPal. To me, you may not want to share all of your information, so we have to have a service that’s tailored for one demographic, and a very different one for a different demographic.”